The average consumer (including myself) doesn’t really consider how freight costs impact the price of something… trust me, if I didn’t know this business, I probably wouldn’t think twice about it either. However, having worked in the logistics industry for 10 years, I try to keep on top of changes that could affect our distribution network.
Whether you buy kitchen cabinets from us or another large distributor, more than likely they will be shipped by the same mode of transportation – common carrier or LTL carrier (less than truckload). All of the LTL carriers go by the NMFC (National Motor Freight Classification) codes for determining how to rate a shipment (or in other words, how much to charge). As of December 31st, that classification was changed and could have a big impact on the cost of shipping cabinets. For anyone not familiar with the NMFC codes, here is a brief explanation of how it works.
The NMFC book is literally about 4 inches thick and they have tried to create a category for any and every product that is shipped. Since we started this business, we have always used NMFC # 80470 sub 3, which means that our freight was classified at class 70. This was the accepted classification for Ready-to-Assemble, knockdown kitchen cabinets. With the new changes, our product goes by density. They eliminated the 80470 number and our product now falls under 80440
So What Does This Really Mean?
Now that you are probably more confused than you were before, what does this mean? Well it completely changes the way that kitchens (especially ready-to-assemble) are going to be shipped. Previously, we could put whatever we wanted on to a skid and as long as it we used 80470-03 it was always shipped at class 70. It was really easy to calculate the costs, we could protect items by leaving room on the skid to avoid it getting damaged, and we could lay large pieces, like pantries and oven units, on a large 8 ft skid to ensure it’s safety… NOW everything is based on dimensional weight. The less weight on a skid the higher the freight class, which means it will cost more to ship. In most cases, this probably won’t be an issue but when there are odd shaped boxes or light products, it could drive the cost of shipping up quite a bit.
This also means that each skid will have to measured and the density calculated so that we can ensure it moves at the right freight class, and it makes it harder to estimate what the cost will be beforehand. These new regulations went into place as of December 31st, so most people may not be aware of them or are just finding out about them.
So as a distributor or manufacturer, what should you do?
Now you really have to think about how you ship cabinets. If you are using LTL carriers, really start to think about how you are palletizing product. Take the time to ensure the density to high enough that it won’t impact your costs. In our case, we have FAK’s that will help minimize the added expense if the density changes significantly.
For more information about the changes, head over to the National Motor Freight Traffic Association website. If you have any specific questions that I can help with, feel free to comment below or contact us at http://www.rtacabinetstore.com